1.3 CHANGES TO THE ISC AGREEMENT, POLICIES AND PROCEDURES OR COMPENSATION PLAN

1.4 DELAYS

1.5 POLICIES AND PROVISIONS SEVERABLE

1.6 WAIVER

SECTION 2 – BECOMING AN ISC

2.1 REQUIREMENTS TO BECOME AN ISC

2.2 NEW ISC REGISTRATION BY INTERNET OR FACSIMILE

2.3 ISC BENEFITS

2.4 TERM AND RENEWAL OF A ZUKUL BUSINESS

2.5 UPGRADING AND DOWNGRADING

SECTION 3 – INCOME DISCLOSURE POLICY

SECTION 4 – ADVERTISING

4.1 ADHERENCE TO THE ZUKUL COMPENSATION PLAN

4.2 USE OF SALES AID

4.3 INTELLECTUAL PROPERTY

4.4 WEB POLICY

4.5 DOMAIN NAMES AND EMAIL ADDRESSES

4.6 ADVERTISED PRICE

4.7 GENERIC BUSINESS ADVERTISEMENTS

4.8 MEDIA AND MEDIA INQUIRIES

4.9 UNSOLICITED EMAIL AND FAX COMMUNICATION

SECTION 5 – OPERATING A ZUKUL BUSINESS

5.1 - BUSINESS ENTITIES:

5.1.1 CHANGES TO A BUSINESS ENTITY

5.1.2 CHANGE OF SPONSOR

5.1.3 CHANGE OF PLACEMENT

5.2 - UNAUTHORIZED CLAIMS AND ACTION:

5.2.1 INDEMNIFICATION

5.2.2 ENDORSEMENT OF ZUKUL SERVICES

5.3 - CONFLICTS

5.3.1 NON-SOLICITATIONS

5.3.2 SALE OF COMPETING GOODS OR SERVICES

5.3.3 TARGETING OTHER DIRECT SELLERS

5.3.4 PRIVACY AND CONFIDENTIALITY

5.3.5 THE DATA MANAGEMENT RULE

5.4 CROSS SPONSORING

5.5 GOVERNMENTAL APPROVAL OR ENDORSEMENT

5.6 IDENTIFICATION

5.7 INCOME TAXES

5.8 INDEPENDENT CONTRACTOR STATUS

5.9 BONUS BUYING

5.10 STACKING

5.11 ONE ZUKUL BUSINESS PER ISC

5.12 SUCCESSION

5.13 SALE, TRANSFER OR ASSIGNMENT OF A ZUKUL BUSINESS

5.14 SEPARATION OF A ZUKUL BUSINESS

5.15 SPONSORING

SECTION 6 - RESPONSIBILITIES OF ISCS

6.1 CHANGE OF ADDRESS, TELEPHONE NO., EMAIL-ADDRESS

6.2 SPONSORING ISC RESPONSIBILITIES

6.2.1 INITIAL TRAINING

6.2.2 ONGOING TRAINING RESPONSIBILITIES

6.3 NON-DISPARAGEMENT

6.4 REPORTING POLICY VIOLATIONS

SECTION 7 - AUTOMATIC BILLING

7.1 BILLING

SECTION 8 - BONUSES AND COMMISSIONS

8.1 BONUS AND COMMISSION QUALIFICATIONS

8.2 ERRORS OR QUESTIONS

8.3 BONUS BUYING PROHIBITED

8.4 REPORTS

SECTION 9 - DISPUTE RESOLUTION AND DISCIPLINARY PROCEEDINGS

9.1 DISCIPLINARY SANCTIONS

9.2 MEDIATION

9.3 ARBITRATION

9.4 GOVERNING LAW, JURISDICTION AND VENUE

SECTION 10 - EFFECT OF CANCELLATION

10.1 EFFECT OF CANCELLATION AND TERMINATION

10.2 NON-RENEWAL

SECTION 11 - DEFINITIONS

1.1 - Code of Ethics

ZUKUL (hereafter referred to as “ZUKUL” or "the Company”) is a values-based company that prides itself on the quality and character of its Independent Sales Consultants (hereinafter referred to as “ISC”).

The following guidelines help ensure a uniform standard of excellence throughout our organization. Every ZUKUL ISC is expected to practice the following ethical behavior when acting in the name of the Company:

A. I will be respectful of every person I meet while doing ZUKUL related business.

B. At all times, I will conduct myself and my business in an ethical, moral, legal and financially sound manner.

C. I will not engage in activities that would bring disrepute to ZUKUL, any ZUKUL corporate officer or employee, myself or other ISCs.

D. I will not make discouraging or disparaging claims toward other ZUKUL ISCs. I will ensure that in all ZUKUL business dealings, I will refrain from engaging in negative language. I will refrain from making any type of slanderous statements.

E. I will provide support and encouragement to my customers to ensure that their experience with ZUKUL is a successful one. I understand that it is important to provide follow-up service and support to my downline.

F. I will correctly represent all the bonus/compensation plans available through ZUKUL and the income potential represented therein. I understand I may not use my own income as an indication of others’ potential success or use compensation checks as marketing materials. I further understand that I may only disclose my ZUKUL income to recruit potential ISCs after I have given a copy of the Income Disclosure Statement to the potential ISCs.

G. I will abide by all of ZUKUL’s Policies & Procedures now and as they may be amended in the future.

1.2 - Policies Incorporated Into ISC Agreement

These Policies and Procedures (hereinafter referred to as the “Policies”), in their present form and as amended at the sole discretion of ZUKUL, are incorporated into and form an integral part of, the ZUKUL ISC Agreement (hereafter referred to as “ISC Agreement”). Throughout these Policies, when the term “Agreement” is used, it collectively refers to the ZUKUL ISC Agreement, these Policies and the ZUKUL Compensation Plan. These documents are incorporated by reference into the ISC Agreement (all in their current form and as amended by ZUKUL). It is the responsibility of each ISC to read, understand, adhere to and ensure that he or she is aware of and operating under the most current version of these Policies. When sponsoring a new ISC, it is the responsibility of the sponsoring ISC to provide the most current version of these Policies prior to his or her execution of the ISC Agreement.

1.3 - Changes to the ISC Agreement, Policies and Procedures or Compensation Plan

Because federal, state and local laws, as well as the business environment, periodically change, ZUKUL reserves the right to amend the Agreement and the prices in its ZUKUL Product Price List in its sole and absolute discretion. Notification of amendments shall appear in Official ZUKUL Materials. This right to amend the Agreement does NOT apply to the arbitration clause found in Section 9. This Section can only be modified by way of mutual consent.

Amendments shall be effective upon publication in Official ZUKUL Materials, including, but not limited to, posting on ZUKUL’s website, e-mail distribution, publication in ZUKUL’s newsletter, product inserts or any other commercially reasonable method. The continuation of an ISC’s ZUKUL business or an ISC’s acceptance of bonuses or commissions constitutes acceptance of any and all amendments.

1.4 - Delays

ZUKUL shall not be responsible for delays and failures in performance of its obligations when performance is made commercially impracticable due to circumstances beyond its reasonable control. This includes, without limitation, strikes, labor difficulties, riot, war, fire, flood, death, curtailment of a party’s source of supply or government decrees or orders.

1.5 - Policies and Provisions Severable

If any provision of the Agreement, in its current form or as may be amended, is found to be invalid or unenforceable for any reason, only the invalid portion(s) of the provision shall be severed and the remaining terms and provisions shall remain in full force and effect and shall be construed as if such invalid or unenforceable provision never comprised a part of the Agreement.

1.6 - Waiver

The Company never gives up its right to insist on compliance with the Agreement and with the applicable laws governing the conduct of a business. No failure of ZUKUL to exercise any right or power under the Agreement or to insist upon strict compliance by an ISC with any obligation or provision of the Agreement, and no custom or practice of the parties at variance with the terms of the Agreement, shall constitute a waiver of ZUKUL’s right to demand exact compliance with the Agreement. Waiver by ZUKUL can be effectuated only in writing by an authorized officer of the Company.

SECTION 2 – BECOMING AN ISC

2.1 - Requirements to Become an ISC

To become a ZUKUL ISC, each applicant must:

A. Be of the age of majority in his or her state of residence.

B. Reside in countries, which have been officially opened by ZUKUL.

C. Have a valid Social Security Number or Federal Employer Identification Number if required by the country or location.

D. Submit a properly completed and signed ISC Agreement to ZUKUL via electronically or fax.

2.2 - New ISC Registration by the Internet and Facsimile

A prospective ISC may self-enroll on the sponsor’s web site. In such event, instead of a physically signed ISC Agreement, ZUKUL will accept the Agreement by accepting the “electronic signature” stating the new ISC has accepted the terms and conditions of the ISC Agreement. Please note that such electronic signature constitutes a legally binding Agreement between the ISC and ZUKUL. Faxed Agreements must include both the front and back of the ISC Agreement.

2.3 - ISC Benefits

Once an ISC Agreement has been accepted by ZUKUL, the benefits of the Compensation Plan and the ISC Agreement are available to the new ISC. These benefits include the right to:

A. Sell ZUKUL services.

B. Participate in the ZUKUL Compensation Plan (receive bonuses and commissions, if eligible).

C. Sponsor other individuals as customers or ISCs into the ZUKUL business and thereby build an organization and progress through the ZUKUL Compensation Plan.

D. Receive periodic ZUKUL literature and other ZUKUL communications.

E. Participate in ZUKUL - sponsored support service training, motivational and recognition functions.

F. Participate in promotional and incentive contests and programs sponsored by ZUKUL for its ISCs.

2.4 – Terms and Renewal of a ZUKUL Business

An ISC must renew their ISC status monthly by submitting the appropriate renewal fee. This payment is due on the anniversary, thirty (30) days of the ISC acceptance date. If the ISC allows his or her business to expire due to nonpayment of the renewal fee, the following will happen:

A. ISC's access to the tools is blocked. ISC will have 21 days to renew his/her account.

B. ISC stops earning any commissions. His/her first available paying up-line will earn his/her commissions while his/her account is expired, as soon as he/she renews the account then he/she will start earning commissions again.

Only in the case where a $1 package expires after 7 days the ISC will have 7 days during which he/she will still earn commissions, however if he/she doesn’t pay for a package by the end of the 21-day period then he/she is downgraded to a free account, he/she is removed from the funnel, he/she stops earning commissions, the funnel is compressed, his/her earned commissions will be distributed 3 levels up 55%, 20%, 10%

C. If ISC renews his/her account within the 21-day period then he/she immediately gains access to the tools and starts earning commissions again. His/her renewal-date remains the same, for example if his/her renewal-date is 01/01/2015 but he/she renews on the 15/01/2015 then his/her next renewal-date will still be 01/02/2015.

D. Only in the case of the $1 package, the start-date is the moment the ISC pays for the upgrade; either prior to or after the 7-day period has expired (as long as it is within the 7-day period after expiration).

If ISC pays for a higher package (Intermediate or Advanced), the new package will commence upon payment and the start date will also be set to that time.

If ISC pays for a beginners package, then it will be considered a lower level and the new package will start upon expiration of the existing $1 package.

$1 package expires 7 days after payment, at which point ISC has 7 days to pay for any Zukul package and keep his/her earned commissions.

E. If ISC doesn’t renew his/her account within the 21-day period then he/she is downgraded to a free account, he/she is removed from the funnel, he/she stops earning commissions, the funnel is compressed and the 50% matching bonus gets paid to the first available paying up-line.

F. ISC is allowed to register for the $1 package only one time.

2.5 – Upgrading and Downgrading

When a ISC pays for an upgrade to a higher level then his/her new start-date is set to the moment of payment and the account is updated immediately.

When a ISC downgrades to a lower level then his/her new start-date remains the same as his/her current package and the account is downgraded at the moment of expiration of the current package.

When downgrading from an advanced or intermediate package to a beginners package the ISC loses his/her position in the funnel, he/she stops earnings from the funnel and stops receiving the 50% matching bonus but continues to receive affiliate earnings.

ISC cannot downgrade to a lower package immediately, but must wait till the existing package expires.

When downgrading to a free package the ISC stops receiving all earnings.

ISC never loses his/her link with his/her directs, so if an expired ISC (that was downgraded to a free member) at any point in the future decides to upgrade again then he/she will immediately resume earning the 50% matching bonus from all of his/her directs.

SECTION 3 – INCOME DISCLOSURE POLICY

In an effort to conduct best business practices, ZUKUL has developed the Income Disclosure Statement (“IDS”). ZUKUL's IDS is designed to convey truthful, timely and comprehensive information regarding the income that ZUKUL ISCs earn. In order to accomplish this objective, a copy of the IDS must be presented to all prospective ISCs.

A copy of the IDS must be presented to a prospective ISC (someone who is not a party to a current ZUKUL ISC Agreement) anytime the Compensation Plan is presented or discussed, or any type of income claim or earnings representation is made.

The terms “income claim” and/or “earnings representation” (collectively referred to as “income claim”) include: (1) statements of average earnings; (2) statements of non-average earnings; (3) statements of earnings ranges; (4) income testimonials; (5) lifestyle claims; and (6) hypothetical claims. Examples of “statements of non-average earnings” include, “Our number one ISC earned over a million ($1,000,000) dollars last year” or “Our average ranking ISC makes five thousand ($5,000) dollars per month.” An example of a “statement of earnings ranges” is “The monthly income for our higher ranking ISCs is ten thousand ($10,000) dollars on the low end to thirty thousand ($30,000) dollars a month on the high end.”

In any meeting that is open to the public in which the Compensation Plan is discussed or any type of income claim is made, you must provide every prospective ISC with a copy of the IDS.

ISCs must adhere to the terms of the ZUKUL Compensation Plan, as set forth in Official ZUKUL Materials. ISCs shall not offer the ZUKUL opportunity through, or in combination with, any other system, program or method of marketing other than that specifically stated in Official ZUKUL Materials. ISCs shall not require or encourage other current or prospective customers or ISCs to participate in ZUKUL in any manner that varies from the program as set forth in Official ZUKUL Materials. ISCs shall not require or encourage other current or prospective customers or ISCs to execute any agreement or contract other than official ZUKUL Agreements and contracts in order to become a ZUKUL ISC. Similarly, ISCs shall not require or encourage other current or prospective customers or ISCs to make any purchase from, or payment to, any individual or other entity to participate in the ZUKUL Compensation Plan, other than those purchases or payments identified as recommended or required in Official ZUKUL Materials.

4.2 - Use of Sales Aids

To promote both the services and the opportunity ZUKUL offers, ISCs must use the sales aids and support materials produced by ZUKUL. If ZUKUL ISCs develop their own sales aids and promotional materials (which includes internet advertising), notwithstanding ISCs’ good intentions, they may unintentionally violate any number of statutes or regulations affecting a ZUKUL business. These violations, although they may be relatively few in numbers, could jeopardize the ZUKUL opportunity for all ISCs. Accordingly, ISCs must submit all written sales aids, promotional materials, advertisements, websites and other literature to the Company for Company’s approval prior to use. Unless the ISC receives specific written approval to use the material, the request shall be deemed denied. All ISCs shall safeguard and promote the good reputation of ZUKUL and its services. The marketing and promotion of ZUKUL, the ZUKUL opportunity, the Compensation Plan and ZUKUL services shall be consistent with the public interest, and must avoid all discourteous, deceptive, misleading, unethical or immoral conduct or practices.

4.3 - Intellectual Property

ZUKUL will not allow the use of its trade names, trademarks, designs or symbols outside of corporate produced and approved sales aids by any person, including ZUKUL ISCs, without prior written authorization from ZUKUL. Furthermore, no ISC may use, publish, reproduce, advertise, sell or display in any manner the name, picture or likeness or voice of another ISC, without prior written consent from the named ISC. This consent must be on file with ZUKUL’s Compliance Department prior to any use.

4.4 – Web Policy

If an ISC desires to utilize an Internet web page to promote his or her business, he or she may do so through Company authorized services only.

A. General

It is your obligation to ensure your online marketing activities are truthful, are not deceptive and do not mislead customers or potential ISCs in any way. Websites and web promotion activities and tactics that mislead or are deceptive, regardless of intent, will not be allowed. This may include representation in any manner that you are an authorized representative for ZUKUL, spam linking (or blog spam), unethical search engine optimization (SEO) tactics, misleading click-through ads (i.e., having the display URL of a PPC campaign appear to resolve to an official ZUKUL Corporate Site when it goes elsewhere), unapproved banner ads and unauthorized press releases. ZUKUL will be the sole determinant of truthfulness as to whether specific activities are misleading or deceptive.

B.Domain Names, Email Addresses and Online Aliases

You cannot use or register domain names, email addresses and/or online aliases that could cause confusion or be misleading or deceptive, in that they cause individuals to believe or assume the communication is from, or is the property of ZUKUL, by showing up as the sender of an email.

Examples of the improper use include but are not limited to:

ZUKUL@msn.com; www.ZUKULDirect.com; www.facebook.com/ZUKUL or derivatives as described herein.

Determinations as to what could cause confusion, mislead or be considered deceptive is at the sole discretion of ZUKUL. If you have a question whether your chosen name is acceptable, you may submit it to compliance@ZUKUL.com for review before use.

C. Approved ISC Websites

The term ISC Website refers to the ISC Website offered by ZUKUL or an approved vendor to affiliates. The term Social Media Website refers to any site that is not specifically prohibited within the terms and conditions of this Agreement, such as Facebook.com, MySpace.com, Twitter.com, YouTube.com, personal blogs or other personal websites.

D. Online Retailing

Approved affiliate websites are intended to provide the affiliates with the tools and means for generating leads, prospecting business, communicating with others, selling products and services, and otherwise advancing your ZUKUL business. You may promote and sell ZUKUL services on any other online retail store or e-commerce site, and you may enlist or knowingly allow a third party (customer) to sell ZUKUL products on any online retail store or ecommerce site.

Social Media sites such as Facebook may also be used to promote your ZUKUL business. You must provide approved ZUKUL links to your ISC replicated website for sales and order processing. All online sales of ZUKUL products must take place and be produced through the ISC Replicated Website (or corporate site).

E.Banner Advertising

You may place banner advertisements on a website, provided you use ZUKUL approved templates and images. All banner advertisements must link to your ISC Website. You may not use blind ads or web pages that make non-compliant product or income claims that are ultimately associated with ZUKUL products or the ZUKUL business opportunity.

F. Spam Linking

Spam linking is defined as multiple consecutive submissions of the same or similar content into blogs, wikis, guest books, websites or other publicly accessible online discussion boards or forums, and is not allowed. This includes blog spamming, blog comment spamming and/or spam dexing. Any comments you make on blogs, forums, guest books etc. must be unique, informative and relevant.

G. Social Networking Sites

You may use social networking websites (Facebook, MySpace, LinkedIn, blogs, forums and other social shared interest sites) to share information about the ZUKUL product, mission and business opportunity and for prospecting and sponsoring. However, these sites may not be used to sell or offer to sell specific ZUKUL services.

Profiles you generate in any social community where you mention or discuss ZUKUL must clearly identify you as a ZUKUL Independent ISC and must appear as described herein. When you participate in those communities, you must avoid inappropriate conversations, comments, images, video, audio, applications or any other adult, profane, discriminatory or vulgar content. The determination of what is inappropriate is at ZUKUL’s sole discretion, and offending ISCs will be subject to disciplinary action and/or termination.

You agree that you will immediately take down a non-compliant site at the request of ZUKUL. Appeals regarding compliance may be submitted after the site has been taken down. Appeals should be directed to the email address set forth in the policy addressing dispute resolutions.

H. Sponsored Links/Pay-Per-Click (PPC) Ads

Sponsored links or pay-per-click ads (PPC) are acceptable. The destination URL must be to your ISC Website. The display URL must also be to your ISC Website and must not portray any URL that could lead the user to assume they are being led to a ZUKUL Corporate site, or be inappropriate or misleading in any way.

I. External Websites

You are allowed external websites to promote your ZUKUL business and the ZUKUL opportunity. If you wish to use an external website, you must do the following:

a) Identify yourself as an Independent ISC for ZUKUL.

b) Use only the approved images and wording authorized by ZUKUL.

c) Adhere to the branding, trademark and image usage policies described in this Agreement.

d) Agree to modify your website to comply with current or future ZUKUL policies.

You are solely responsible and liable for your own website content, messaging, claims and information, and must ensure your website appropriately represents and enhances the ZUKUL brand and adheres to all ZUKUL guidelines and policies. Additionally, your website must not contain disingenuous popup ads or promotions or malicious code. Decisions and corrective actions in this area are at ZUKUL’s sole discretion. You are encouraged to use the approved ZUKUL images that are available through the business suite.

J. ZUKUL ISC Image Mandate

When using a Social Media or external website it must contain:

a) A ZUKUL ISC Logo from the approved templates.

b) Your Name and Title (example: Joan Arc, Independent ISC, ZUKUL).

c) A link to your ISC Replicated Website.

Although ZUKUL brand themes and images are desirable for consistency, anyone landing on your page needs to clearly understand that they are at an Independent ISC site, and not a ZUKUL Corporate page.

4.6 - Advertised Price

You may not advertise any of ZUKUL’s services at a price LESS than the highest Company published price of the equivalent service. No special enticement advertising is allowed. This includes, but is not limited to, offers of free membership or other such offers that grant advantages beyond those available through the Company.

4.7 - Generic Business Advertisements

If you advertise via newspaper or other advertising venues, the following rules apply:

A. No advertisement may imply that a job, position, salary or any type of employment is allowed.

B. No advertisement may promote, represent or imply salaried positions, management positions, hourly wages, full or part-time employment, or guaranteed incomes. The ZUKUL opportunity is not a job, and may not be presented as such. Terms such as “manager trainee,” “management positions available,” “travel provided,” “call for interview,” “positions available,” “now hiring,” and other misleading statements are not allowed.

C. No specific income can be promised or implied, and any references to compensation must use the word “commissions” to indicate the independent contractor status of ISCs.

D. Advertisements may not contain references to ZUKUL or its services and may not use any of ZUKUL’s trademarks or trade-names.

Any requests for variances from the above rules must be submitted to ZUKUL and approved in writing prior to publication. Please direct any inquiries to compliance@ZUKUL.com.

4.8 - Media and Media Inquiries

ISCs must not initiate any interaction with the media or attempt to respond to media inquiries regarding ZUKUL, its services, or their independent ZUKUL business. All inquiries by any type of media must be immediately referred to ZUKUL’s Compliance Department. This policy is designed to ensure that accurate and consistent information is provided to the public, as well as a proper public image.

4.9 - Unsolicited Email and Fax Communication

ZUKUL does not permit ISCs to send unsolicited emails, unless such emails strictly comply with applicable laws and regulations, including, without limitation, the federal CAN SPAM Act. Any email sent by an ISC that promotes ZUKUL, the ZUKUL opportunity or ZUKUL services, must comply with the following:

A. There must be a functioning return email address to the sender.

B. There must be a notice in the email that advises the recipient that they may reply to the email, via the functioning return email address, to request that future email solicitations or correspondence not be sent to him or her (a functioning “opt-out” notice).

C. The email must include the ISC’s physical mailing address.

D. The email must clearly and conspicuously disclose that the message is and advertisement or solicitation.

E. The use of deceptive subject lines and/or false header information is prohibited.

F. All opt-out requests, whether received by email or regular mail, must be honored. If an ISC receives an opt-out request from a recipient of an email, the ISC must forward the opt-out request to the Company. ZUKUL may periodically send commercial emails on behalf of ISCs. By entering into the ISC Agreement, ISC agrees that the Company may send such emails and that the ISC’s physical and email addresses will be included in such emails, as outlined above. ISCs shall honor opt-out requests generated as a result of such emails sent by the Company. Except as provided in this section, ISCs may not use or transmit unsolicited faxes or use an automatic telephone dialing system relative to the operation of their ZUKUL businesses.

SECTION 5 – OPERATING A ZUKUL BUSINESS

5.1 - Business Entities

A corporation, partnership or trust (collectively referred to in this section as a “Business Entity”) may apply to be a ZUKUL ISC by submitting a ZUKUL ISC Application and Agreement along with its Certificate of Incorporation, Articles of Organization, Partnership Agreement or trust documents (these documents are collectively referred to as the “Entity Documents”) to ZUKUL. A ZUKUL business may change its status under the same sponsor from an individual to a partnership, corporation or trust or from one type of entity to another. To do so, the ISCs must provide the Entity Documents to ZUKUL. The ISC Application must be signed by all of the shareholders, partners or trustees. Members of the entity are jointly and severally liable for any indebtedness or other obligation to ZUKUL.

5.1.1 - Changes to a Business Entity

Each ISC must immediately notify ZUKUL of any changes to the type of business entity they utilize in operating their ZUKUL business, and the addition or removal of business associates. A ZUKUL business may change its status under the same sponsor from an individual to a partnership, corporation or trust or from one type of entity to another. The ISC Agreement form must be signed by all of the shareholders, partners or trustees. Members of the entity are jointly and severally liable for any indebtedness or other obligation to ZUKUL.

5.1.2 - Change Of Sponsor

To protect the integrity of all marketing organizations and safeguard the hard work of all ISCs, ZUKUL rarely allows changes in sponsorship, with the rare exception of direct line changes (meaning placement is not affected). A direct line change request must be made by submitting a Sponsor Change Request via Email to sponsor@zukul.com within a seven (7) day period from the date of enrollment, and must come from the current listed sponsor.

A Sponsor of an ISC can NEVER be changed if the ISC purchased Guaranteed Signups.

If an ISC did not purchase Guaranteed Signups and wishes to change their sponsor, but the new Sponsor is in the rotator system of the Guaranteed Signups then the ISC will count as one of the new Sponsor's guaranteed signups.

5.1.3 - Change Of Placement

A request for change of placement must be submitted within seven (7) days of the date of enrollment and must be requested by the current listed sponsor. An ISC can only be moved inside of the same sponsor’s organization. If approved, an ISC is placed in the first available open bottom position on the date that the change is made. ISCs who have earned commissions or achieved rank are not eligible for placement changes. Please note that decisions made for any change request (sponsor or placement) are at the sole discretion of ZUKUL.

5.2 - Unauthorized Claims and Action

5.2.1 - Indemnification

An ISC is fully responsible for all of his or her verbal and/or written statements made regarding ZUKUL services and the Compensation Plan, which are not expressly contained in Official ZUKUL Materials. ISCs agree to indemnify ZUKUL and hold it harmless from any and all liability including judgments, civil penalties, refunds, attorney fees, court costs or lost business incurred by ZUKUL as a result of the ISC’s unauthorized representations or actions. This provision shall survive the cancellation of the ISC Agreement.

5.2.2 – Endorsements of ZUKUL Services

No claims as to any services offered by ZUKUL may be made except those contained in Official ZUKUL Materials.

5.3 - Conflicts

5.3.1 – Nonsolicitations

ZUKUL ISCs are free to participate in other multilevel or network marketing business ventures or marketing opportunities (collectively “Network Marketing”). However, during the term of this Agreement, ISCs may not directly or indirectly recruit other ZUKUL customers or ISCs, other than those they have personally sponsored for any other Network Marketing business. Following the cancellation of an ISC Agreement, and for a period of one (1) calendar year thereafter, with the exception of an ISC who is personally sponsored by the former ISC, a former ISC may not recruit any ZUKUL ISC or customer for another Network Marketing business.

5.3.2 - Sale of Competing Goods or Services

During this Agreement and for six (6) months thereafter, ISCs must not sell, or attempt to sell, any competing non-ZUKUL programs or services to ZUKUL customers or ISCs. Any program, product, service or direct selling opportunity in the same generic categories as the ZUKUL services are deemed to be competing, regardless of differences in cost, quality or other distinguishing factors.

5.3.3 - Targeting Other Direct Sellers

Should ISCs engage in solicitation and/or enticement of members of another direct sales company to sell or distribute ZUKUL services, they bear the risk of being sued by the other direct sales company. If any lawsuit, arbitration or mediation is brought against an ISC alleging that they engaged in inappropriate recruiting activity of its sales force or Customers, ZUKUL will not pay any of the ISC’s defense costs or legal fees, nor will ZUKUL indemnify the ISC for any judgment, award or settlement.

5.3.4 - Privacy and Confidentiality

All ISCs are required to abide by the Company’s Privacy Policy with regard to ISC and customer information.

5.3.5 - The Data Management Rule

The Data Management Rule is intended to protect the Line of Sponsorship (herinafter referred to as "LOS") for the benefit of all ISCs, as well as ZUKUL. LOS information is information compiled by ZUKUL that discloses or relates to all or part of the specific arrangement of sponsorship within the ZUKUL business, including, without limitation, ISC lists, sponsorship trees, and all ISC information generated there from, in its present and future forms. The ZUKUL LOS constitutes a commercially advantageous, unique, and proprietary trade secret (Proprietary Information), which it keeps proprietary and confidential and treats as a trade secret. ZUKUL is the exclusive owner of all Proprietary Information, which is derived, compiled, configured, and maintained through the expenditure of considerable time, effort and resources by ZUKUL and its ISCs. Through this Rule, ISCs are granted a personal, non-exclusive, non-transferable and revocable right by ZUKUL to use Proprietary Information only as necessary to facilitate their business as contemplated under these Policies and Procedures.

5.4 - Cross Sponsoring

Actual or attempted cross-group sponsoring is strictly prohibited. “Cross-group sponsoring” is defined as the enrollment, indirect or otherwise, of an individual or entity that already has a current customer number or ISC Agreement on file with ZUKUL, or who has had such an Agreement within the preceding six (6) calendar months, within a different line of sponsorship. The use of a spouse’s or relative’s name, trade names, DBAs, assumed names, corporations, partnerships, trusts, Federal Tax Identification Numbers or fictitious identification numbers to circumvent this policy is prohibited. This policy shall not prohibit the transfer of a ZUKUL business in accordance with the “Sale, Transfer or Assignment of ZUKUL Business” section of these Policies and Procedures.

5.5 - Governmental Approval or Endorsement

Neither federal nor state regulatory agencies nor officials approve or endorse any direct selling or network marketing companies or programs. Therefore, ISCs shall not represent or imply that ZUKUL or its Compensation Plan have been “approved,” “endorsed” or otherwise sanctioned by any government agency.

5.6 - Identification

All ISCs are required to provide their Social Security Number, Federal Employer Identification Number or their Government Issued ID Number to ZUKUL, either on the ISC Agreement or at the Company’s request. Upon enrollment, the Company will provide a unique ISC Identification Number to the ISC by which they will be identified. This number will be used to place orders and track commissions and bonuses.

5.7 - Income Taxes

Every year, ZUKUL will provide an IRS Form 1099 - MISC (Non-Employee Compensation) earnings statement to each U.S. resident, as required by the Internal Revenue Service. Each ISC is responsible for paying local, state and federal taxes on any income generated as an ISC. If a ZUKUL business is tax exempt, the Federal Employer Identification Number must be provided to ZUKUL. Any ISC that does not provide a valid Social Security Number or Federal Employer Identification Number is subject to the federal backup withholding laws and 28% of their commissions and bonus will be withheld and submitted to the IRS.

5.8 - Independent Contractor Status

You are an independent contractor. You are not an agent, employee, partner or joint venture with the Company. You may not represent yourself as anything other than an Independent ISC. You have no authority to bind ZUKUL to any obligation. You are responsible for paying your own self-employment taxes, federal income taxes and other taxes required by law. You must obey any federal, state and local laws, as well as Company rules and regulations pertaining to your independent ZUKUL Business or the acquisition, receipt, holding, selling, distributing or advertising of ZUKUL’s services or opportunity.

ISCs may not answer the telephone by saying “ZUKUL,” “ZUKUL Incorporated,” or by any other manner that would lead the caller to believe that they have reached ZUKUL’s corporate offices. An ISC may only represent that he/she is a ZUKUL ISC. Therefore, all correspondence and business cards relating to or in connection with an ISC’s ZUKUL business shall contain the ISC’s name followed by the term “ISC.”

5.9 – Bonus Buying

Paying the subscription fees solely for the purpose of collecting bonuses or achieving rank is prohibited. The purchase of any of the ZUKUL services are never required to advance in the compensation plan.

5.10 – Stacking

Stacking is the unauthorized manipulation of the ZUKUL compensation system and/or the marketing plan in order to trigger commissions or cause a promotion off a downline ISC in an unearned manner. One example of stacking occurs when a sponsor places participants under an inactive downline participant (who may not know or have any relationship with the clients) in order to trigger unearned qualification for commissioning. Another example of stacking is the manipulative placement of ISCs within a downline organization in order to trigger a promotion. Stacking is unethical and unacceptable behavior, and as such, it is a punishable offense with measures up to, and including, the termination of the ISC’s positions of all individuals found to be directly involved.

5.11 - One ZUKUL Business Per ISC

An ISC may operate or have an ownership interest, legal or equitable, as a sole proprietorship, partner, shareholder, trustee or beneficiary, in only one ZUKUL business. No individual may have, operate or receive compensation from more than one ZUKUL business. Individuals of the same family unit may each enter into or have an interest in their own separate ZUKUL businesses, only if each subsequent family position is placed frontline to the first family member enrolled. A “family unit” is defined as spouses and dependent children living at or doing business at the same address.

5.12 - Succession

Upon the death or incapacitation of an ISC, their business may be passed to a designated heir(s). Appropriate legal documentation must be submitted to the Company to ensure the transfer is proper. Whenever a ZUKUL business is transferred by a will or other testamentary process, the beneficiary acquires the right to collect all bonuses and commissions of the deceased ISC’s marketing organization, provided, the following qualifications are met. The successor(s) must:

• Execute an ISC Agreement;

• Comply with terms and provisions of the Agreement;

• Meet all of the qualifications for the deceased ISC’s rank/status;

• Provide ZUKUL with an “address of record” to which all bonus and commission checks will be sent. Bonus and commission checks of a ZUKUL business transferred pursuant to this section will be paid in a single check jointly to the successor(s).

• Form a business entity and acquire a federal Taxpayer Identification Number, if the business is bequeathed to joint successors. ZUKUL will issue all bonus and commission checks to the business entity

5.13 - Sale, Transfer or Assignment of a ZUKUL Business

Although a ZUKUL business is a privately owned, independently operated business, the sale, transfer or assignment of a ZUKUL business is subject to certain limitations. If an ISC wishes to sell their ZUKUL business, the following criteria must be met:

A. Protection of the existing line of sponsorship must always be maintained so that the ZUKUL business continues to be operated in that line of sponsorship.

B. The buyer or transferee must become a qualified ZUKUL ISC. If the buyer is an active ZUKUL ISC, they must first terminate their ZUKUL business and wait six (6) calendar months before acquiring any interest in the new ZUKUL business.

C. Before the sale, transfer or assignment can be finalized and approved by ZUKUL, any debt obligations the selling ISC has with ZUKUL must be satisfied.

D. The selling ISC must be in good standing and not in violation of any of the terms of the Agreement in order to be eligible to sell, transfer, or assign a ZUKUL business.

Prior to selling a ZUKUL business, the selling ISC must notify ZUKUL’s Compliance Department of their intent to sell the ZUKUL business. No changes in line of sponsorship can result from the sale or transfer of a ZUKUL business. An ISC may not sell, transfer or assign portions of their business, as the position must be sold in its entirety.

5.14 - Separation of a ZUKUL Business

SUKUL ISCs sometimes operate their ZUKUL businesses as husband-wife partnerships, regular partnerships, corporations, or trusts. At such time as a marriage may end in divorce or a corporation, partnership, or trust (the latter three entities are collectively referred to herein as “entities”) may dissolve, arrangements must be made to assure that any separation or division of the business is accomplished so as not to adversely affect the interests and income of other businesses up or down the line of sponsorship. If the separating parties fail to provide for the best interests of other ISCs and the Company in a timely fashion, ZUKUL will involuntarily terminate the ISC Agreement.

During the divorce or entity dissolution process, the parties must adopt one of the following methods of operation:

A. One of the parties may, with consent of the other(s), operate the ZUKUL business pursuant to an assignment in writing whereby the relinquishing spouse, shareholders, partners, or to an assignment in writing whereby the relinquishing spouse, shareholders, partners, or relinquishing shareholder, partner, or trustee.

B. The parties may continue to operate the ZUKUL business jointly on a “business-as-usual” basis, whereupon all compensation paid by ZUKUL will be paid according to the status quo as it existed prior to the divorce filing or dissolution proceedings. This is the default procedure if the parties do not agree on the format set forth above. The Company will never remove a party to a position from an ISC account without that party’s written permission and signature. Under no circumstances will the downline organization of divorcing spouses or a dissolving business entity be divided. Under no circumstances will ZUKUL split commission and bonus checks between divorcing spouses or members of dissolving entities. ZUKUL will recognize only one downline organization and will issue only one commission check per ZUKUL business per commission cycle. Commission checks shall always be issued to the same individual or entity. In the event that parties to a divorce or dissolution proceeding are unable to resolve a dispute over the disposition of commissions and ownership of the business in a timely fashion as determined by the Company, the ISC Agreement shall be involuntarily cancelled.

5.15 - Sponsoring

All Active ISCs in good standing have the right to sponsor and enroll others into ZUKUL. Each prospective customer or ISC has the ultimate right to choose his or her own sponsor. If two ISCs claim to be the sponsor of the same new ISC or customer, the Company shall regard the first application received by the Company as controlling.

SECTION 6 – RESPONSIBILITIES OF ISCs

6.1 - Change of Address, Telephone, Email-Address

To ensure timely communications, delivery of support materials and commission checks, it is critically important that the ZUKUL’s files are current. ISCs planning to move or change their email address must submit an amended ISC Agreement complete with the new information.

6.2 – Sponsoring ISC Responsibilities:

6.2.1 – Initial Training

Any ISC who sponsors another ISC into ZUKUL must perform a bona fide assistance and training function to ensure that their downline is properly operating their ZUKUL business. ISCs must provide the most current version of the Policies, the Income Disclosure Statement and Compensation Plan to individuals whom they are sponsoring to become ISCs before the applicant signs an ISC Agreement.

6.2.2 – Ongoing Training Responsibilities

ISCs must monitor the ISCs in their downline organizations to ensure that downline ISCs do not make improper product or business claims, or engage in any illegal or inappropriate conduct. Upon request, every ISC should be able to provide documented evidence to ZUKUL of their ongoing fulfillment of the responsibilities of a sponsor.

6.3 – Nondisparagement

ISCs must not disparage, demean or make negative remarks about ZUKUL, other ZUKUL ISCs, ZUKUL’s services, the Compensation Plan, or ZUKUL’s owners, board members, directors, officers or employees.

6.4 - Reporting Policy Violations

ISCs observing a Policy violation by another ISC should submit a written report of the violation directly to the attention of the ZUKUL Compliance Department, complete with all supporting evidence and pertinent information. It is important to understand that information that is submitted will be kept confidential.

SECTION 7 – AUTOMATIC BILLING

7.1 - Monthly Billing

The subscription fees are automatically renewed each month with a credit or debit card maintained on file with ZUKUL or is also payable by ZUKUL available balance. The ISC may make adjustments to their monthly subscription in the back office of the ZUKUL website.

SECTION 8 – BONUSES AND COMMISSIONS

8.1 - Bonus and Commission Qualifications

In order to qualify to receive commissions and bonuses, an ISC must be in good standing and comply with the terms of the Agreement and these Policies. An ISC will qualify to receive commissions and bonuses, as long as he/she produces one (1) personal membership sale each month or maintains a personal membership in good standing for himself/herself. An ISC is not required to maintain a personal membership, but may do so if desired for purposes of this section.

8.2 - Errors or Questions

If an ISC has questions about or believes any errors have been made regarding commissions, bonuses, Downline Activity Reports, or charges, the ISC must notify ZUKUL in writing within thirty (30) days of the date of the purported error or incident in question. ZUKUL will not be responsible for any errors, omissions or problems not reported to the Company within thirty (30) days.

8.3 - Bonus Buying Prohibited

Bonus buying is strictly and absolutely prohibited. Bonus buying includes: (a) the enrollment of individuals or entities without the knowledge of and/or execution of an ISC Agreement by such individuals or entities; (b) the fraudulent enrollment of an individual or entity as an ISC or customer; (c) the enrollment or attempted enrollment of non-existent individuals or entities as ISCs or customers (“phantoms”); (d) purchasing ZUKUL services on behalf of another ISC or customer, or under another ISC’s or customer’s ID number, to qualify for commissions or bonuses; and/or (e) any other mechanism or artifice to qualify for rank advancement, incentives, prizes, commissions or bonuses that is not driven by bona fide product or service purchases by end user consumers.

8.4 - Reports

All information provided by ZUKUL, including, but not limited to, personal sales volume (or any part thereof), and downline sponsoring activity, is believed to be accurate and reliable. Nevertheless, due to various factors, including, but not limited to, the inherent possibility of human and mechanical error, the accuracy, completeness and timeliness of orders, denial of credit card and electronic check payments, an ISC whose ISC Agreement is cancelled, shall receive commissions and bonuses only for the last full pay period he or she worked prior to cancellation (less any amounts withheld during an investigation preceding an involuntary cancellation).

A ZUKUL participant has a right to cancel at any time, regardless of reason. Cancellation must be submitted in writing to the Company at its principal business address, or via email to ZUKUL.

8.5 – Refund Policy

ZUKUL offers a seven (7) day satisfaction guarantee on all initial fees paid to the Company. All subsequent fees are nonrefundable. When a refund is requested by a participant, the bonuses and commissions attributable to the refunded service will be deducted from the participant who received bonuses or commissions on such sales. Deductions will occur in the month in which the refund is given and continue every pay period thereafter until the commission is recovered.

SECTION 9 – DISPUTE RESOLUTION AND DISCIPLINARY PROCEEDINGS

9.1 - Disciplinary Sanctions

Violation of the Agreement and these Policies and, violation of any common law duty, including, but not limited to, any applicable duty of loyalty, any illegal, fraudulent, deceptive, or unethical business conduct, or any act or omission by an ISC that, in the sole discretion of the Company, may damage its reputation or goodwill (such damaging act or omission need not be related to the ISC’s ZUKUL business), may result, at ZUKUL’s discretion, in one or more of the following corrective measures:

• Issuance of a written warning or admonition;

• Requiring the ISC to take immediate corrective measures;

• Imposition of a fine, which may be withheld from bonus and commission checks;

• Loss of rights to one or more bonus and commission checks;

• Withholding from an ISC all or part of the ISC’s bonuses and commissions during the period that ZUKUL is investigating any conduct allegedly contrary to the Agreement. If an ISC’s business is cancelled for disciplinary reasons, the ISC will not be entitled to recover any commissions withheld during the investigation period;

• Suspension of the individual’s ISC Agreement for one or more pay periods;

• Involuntary termination of the offender’s ISC Agreement;

• Any other measure expressly allowed within any provision of the Agreement or which ZUKUL deems practicable to implement and appropriate to equitably resolve injuries caused partially or exclusively by the ISC’s policy violation or contractual breach;

• Instituting legal proceedings for monetary and/or equitable relief. Each violation is reviewed on a case-by-case basis, and all disciplinary actions are at the sole discretion of ZUKUL.

9.2 - Mediation

Prior to instituting arbitration, the parties shall meet in good faith and attempt to resolve any dispute arising from or relating to the Agreement through non-binding mediation. One individual who is mutually acceptable to the parties shall be appointed as mediator. The mediator’s fees and costs, as well as the costs of holding and conducting the mediation, shall be divided equally between the parties. Each party shall pay its portion of the anticipated shared fees and costs at least ten (10) days in advance of the mediation. Each party shall pay its own attorneys fees, costs and individual expenses associated with conducting and attending the mediation. Mediation shall be held in Limassol, Cyprus, and shall last no more than two (2) business days.

9.3 - Arbitration

If mediation is unsuccessful, any controversy or claim arising out of or relating to the Agreement, or the breach thereof, shall be settled by confidential arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules, and judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction there of ISCs waive all rights to trial by jury or to any court. All arbitration proceedings shall be held in Limassol, Cyprus. All parties shall be entitled to all discovery rights pursuant to the Federal Rules of Civil Procedure. There shall be one arbitrator, an attorney at law, who shall have expertise in business law transactions with a strong preference being an attorney knowledgeable in the direct selling industry, selected from the panel which the American Arbitration Panel provides. Each party to the arbitration shall be responsible for its own costs and expenses of arbitration, including legal and filing fees. The decision of the arbitrator shall be final and binding on the parties and may, if necessary, be reduced to a judgment in any court of competent jurisdiction. This agreement to arbitration shall survive any termination or expiration of the Agreement.

NO CLASS ACTION, OR OTHER REPRESENTATIVE ACTION OR PRIVATE ATTORNEY GENERAL ACTION OR JOINDER OR CONSOLIDATION OF ANY CLAIM WITH A CLAIM OF ANOTHER PERSON OR CLASS OF CLAIMANTS SHALL BE ALLOWABLE.

Nothing in these Policies and Procedures shall prevent ZUKUL from applying to and obtaining from any court having jurisdiction a writ of attachment, a temporary injunction, preliminary injunction, permanent injunction or other relief available to safeguard and protect ZUKUL’s interest prior to, during, or following the filing of any arbitration or other proceeding or pending the rendition of a decision or award in connection with any arbitration or other proceeding.

SECTION 10 – EFFECT OF CANCELLATION

10.1 - Effect of Cancellation and Termination

So long as an ISC remains active and complies with the terms of the ISC Agreement and these Policies, ZUKUL shall pay commissions to such ISC in accordance with the Compensation Plan. An ISC’s bonuses and commissions constitute the entire consideration for the ISC’s efforts in generating sales and all activities related to generating sales (including, but not limited to, building a downline organization). Following an ISC’s non-continuation of his or her ISC Agreement, cancellation for inactivity, or voluntary or involuntary cancellation (termination) of his or her ISC Agreement (all of these methods are collectively referred to as “Cancellation”), the former ISC shall have no right, title, claim or interest to the downline organization which he or she operated, or any commission or bonus from the sales generated by the organization. ISCs waive any and all rights, including, but not limited to, property rights in the downline which they may have had. Following an ISC’s cancellation of his or her ISC Agreement, the former ISC shall not hold him or herself out as a ZUKUL ISC and shall not have the right to sell ZUKUL products or services. An ISC whose ISC Agreement is cancelled shall receive commissions and bonuses only for the last full pay period he or she worked prior to cancellation (less any amounts withheld during an investigation preceding an involuntary cancellation).

A ZUKUL participant has a right to cancel at any time, regardless of reason. Cancellation must be submitted in writing to the Company at its principal business address or via email to ZUKUL. The written notice must include the ISC’s signature, printed name, address and ISC ID Number.

10.2 - Non-Renewal

An ISC may also voluntarily cancel their ISC Agreement by failing to pay the renewal fee. ISCs have a 60 day grace period to get back into compliance for failure to pay the administrative fee.

SECTION 11 – DEFINITIONS

AGREEMENT: The contract between the Company and each ISC, which includes the ISC Agreement, the ZUKUL Policies and the ZUKUL Compensation Plan, all in their current form and as amended by ZUKUL in its sole discretion. These documents are collectively referred to as the “Agreement.”

CANCEL: The termination of an ISC’s business. Cancellation may be either voluntary, involuntary or through non-renewal.

COMPENSATION PLAN: The guidelines and referenced literature for describing how ISCs can generate commissions and bonuses.

CUSTOMER: A Customer who purchases ZUKUL services and does not engage in building a business or selling the service.

ISC: An individual, who purchases product, generates sales and business building commissions.

LINE OF SPONSORSHIP (LOS): A report generated by ZUKUL that provides critical data relating to the identities of ISCs, sales information and enrollment activity of each ISC’s organization. This report contains confidential and trade secret information, which is proprietary to ZUKUL.

ORGANIZATION: The Customers and ISCs placed below a particular ISC.

OFFICIAL ZUKUL MATERIAL: Literature, audio or video tapes, and other materials developed, printed, published and distributed by ZUKUL to ISCs.

PLACEMENT: Your position inside your Sponsor’s organization.

RECRUIT: For purposes of ZUKUL’s Conflict of Interest Policy, the term “Recruit” means the actual or attempted solicitation, enrollment, encouragement, or effort to influence in any other way, either directly, indirectly, or through a third party, another ZUKUL ISC or Customer to enroll or participate in another multilevel marketing, network marketing, or direct sales opportunity.

SPONSOR: An ISC who enrolls a Customer or another ISC into the Company, and is listed as the Sponsor on the ISC Agreement. The act of enrolling others and training them to become ISCs is called “sponsoring.”

UPLINE: This term refers to the ISC or ISCs above a particular ISC in a sponsorship line up to the Company. It is the line of sponsors that links any particular ISC to the Company.